Ijmet 10 01_177

http://www.iaeme.com/IJMET/index.asp 1793 editor@iaeme.com
International Journal of Mechanical Engineering and Technology (IJMET)
Volume 10, Issue 01, January 2019, pp. 1793-1803, Article ID: IJMET_10_01_177
Available online at http://www.iaeme.com/ijmet/issues.asp?JType=IJMET&VType=10&IType=1
ISSN Print: 0976-6340 and ISSN Online: 0976-6359
© IAEME Publication Scopus Indexed
ANALYSIS OF MANUFACTURING PROCESS
AND PRODUCTION LINE FOR QUALITY IN
PAPER INDUSTRY
Nithesh Naik
Department of Mechanical and Manufacturing Engineering, Manipal Institute of Technology,
Manipal Academy of Higher Education, Manipal, Udupi, 576104, Karnataka, India
Dashratharaj K Shetty*
Department of Humanities and Management, Manipal Institute of Technology, Manipal
Academy of Higher Education, Manipal, Udupi, 576104, Karnataka, India
Balakrishna Maddodi
Department of Civil Engineering, Manipal Institute of Technology, Manipal Academy of
Higher Education, Manipal, Udupi, 576104, Karnataka, India
Namesh Malarout
Department of Media Technology, Manipal Institute of Technology, Manipal Academy of
Higher Education, Manipal, Udupi, 576104, Karnataka, India
Jyothsna Samant
Department of Commerce ,Manipal Institute of Technology, Manipal Academy of Higher
Education, Manipal, Udupi, 576104, Karnataka, India
ABSTRACT
The governance, risk and compliance services (GRCS) of an organization helps to
govern the strategies, manage the risks, mitigate the problems identified, and to
comply with the rules, regulations, policies and procedures of the organization. The
study deals with the investigation of the process of a paper mill. Internal financial
check audits are performed, using a risk matrix to consolidate process ineﬃciencies
and gaps. Interviews conducted identify the employee related problems. The standard
operating procedure (SOP) are compared to the benchmarks followed in the industry
and recommendations are provided to improve the processes. The audits conducted
identified non-compliance in the areas like manufacturing process, regular medical
tests of employees, delay in the payment of provident fund, workers who have worked
without taking required amount of rest and excess disposal of waste. The GRCS
framework designed through the current investigations helps to comply with all rules,
regulations and policies in paper manufacturing industry. The non-compliance could

Analysis of Manufacturing Process and Production Line for Quality in Paper Industry
be avoided in advance before the statutory bodies by training the workers regarding
the various policies and procedures of the organization.
Keywords: Quality, manufacturing, governance, risk, management, compliance, audit.
Cite this Article: Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi,
Namesh Malarout and Jyothsna Samant, Analysis of Manufacturing Process and
Production Line for Quality in Paper Industry, International Journal of Mechanical
Engineering and Technology, 10(1), 2019, pp. 1793-1803.
http://www.iaeme.com/IJMET/issues.asp?JType=IJMET&VType=10&IType=1
1. INTRODUCTION
The governance, risk and compliance has rapidly pierced into the business community over
the last years. A holistic approach has been followed for transformation in corporate
governance and encompass areas like board operations, business ethics, risk and assurance.
Checking for governance framework involves testing of all the processes guiding the
company and segregation of duties to ensure that the controls and processes in place are
effective. Governance, risk and compliance commonly termed as GRC is an integrated
approach used in service, manufacturing and software industry [1-3]. The Figure 1 shows the
frame of activities carried out to identify the non-compliances if any and mitigate them to
improvise the processes.
Risk assessment is the identification and analysis of negative aspects in an organization,
and identify the measures to resolve them in-order to achieve the objectives of the
organization. Compliance ensures that the organization is not exposed to risks due to the
operations carried out without focus on transparency and safety rules followed. “Corporate
governance provides a route through which the objectives of the company are set, and the
means of accomplishing those objectives and achieving success are determined” [3-4].
Figure 1 Governance, Risk and Compliance Chart
Strategic
Management
Business
Processes
Policies and
Procedures
Performance
Management
Risk
Management
Control
Activities
Audits

Nithesh Naik, Dashratharaj K Shetty, Balakrishna Maddodi, Namesh Malarout and Jyothsna
Samant
2. INTERNAL FINANCIAL CONTROL (IFC) AUDIT
Internal financial controls framework as shown in Figure 2, considers a holistic approach by
focuses on entity level as well on process level. This audit defines the framework for the
governance stating clearly the accountability. The framework streamline and standardize
controls giving opportunities to detect potential leakages or fraud.
Figure 2 Internal Financial Controls Framework
2.1. Internal Audit
The risk based approach aids to enhance the various aspects of business. This method breaks
the process and monitors the individual process to ensure high level of compliance. The
approach, focuses on the strategic and significant risks to the organization as a top-down
approach.
2.2. Statutory Compliance
The policies and procedures of a company and external regulations together define the
statutory compliance of an organization. The need to meet the requirements as specified under
laws, regulations and organization’s policies and procedures.
3. METHODOLOGY
The compliances check was performed in paper industry across all the processes. The
discrepancies were identified and methods to eliminate non compliances were discovered.
The Table 2 shows the various statutory regulations based on department pertaining to paper
industry. Whereas, Table 1 indicated various checks performed in EHS (Environment, Health
and Safety) related acts. [7-9]
Organisation
structure, policies
and procedures
Enterprise risk
management
Oversight over
financial reporting
and disclosures
Board and Audit
committee oversight
over Internal
Financial Controls
Controls on
outsourced
processes
Integrity and ethics
framework
Assignment of
authority and
responsibility

Table 1 Checks Performed in EHS (Environment, Health and Safety) related acts
Name of the Act Checks Conducted / Data Requested
E-Waste (Management)
Rules, 2016
Annual returns in form 3 filed to the concerned state
pollution control board
E-waste storage and disposal records
Records of e-waste generated in form 2
Table 2 Statutory Regulations based on Department
Human Resources
EHS - Environment, Health
and Safety
Operational
Payment Of Gratuity
Act, 1972
Environment (Protection) Act,
1986
Indian Boilers Act,
1923
Minimum Wages Act,
1948
Air (Prevention And Control
Of Pollution) Act, 1981
The Electricity Act,
2003
Payment Of Bonus Act,
1965
Noise Pollution (Regulation
and Control) Rules, 2000
Petroleum Act, 1934
Equal Remuneration Act
and Rules, 1976
E-Waste (Management)
Rules, 2016
Atomic Energy Act,
1962
The Andhra Pradesh
Contract Labor
(Regulation And
Abolition) Rules, 1971
Bio-Medical Waste
Management Rules, 2016
Gas Cylinders Rules,
2016
Andhra Pradesh
Factories Rules, 1950
Hazardous and Other Wastes
(Management and
Transboundary Movement)
Rules, 2016.
-
Payment Of Gratuity
(Central) Rules, 1972
Food Safety And Standards
Act, 2006
-
The Employees
Provident Fund Act,
1952
Energy Conservation Act,
2001
-
The Maternity Benefit
Act, 1961
The Andhra Pradesh Fire
Service Act,1999
-
Table 3 indicates various checks performed in operational acts. Table 4 indicates various
checks on HR related acts pertaining to the factories act.
The paper industry shall overcome several challenges to sustain and meet the timely
consumer requirements with the quality product. Few of the challenges to be addressed

Samant
includes, to ensure in time availability of raw material, reduced cost of production,
improvised overall quality of production and reduction in waste and scrap. The statutory
bodies perform regular checks on the operational process and the employee related issues to
ensure compliance of the industry to rules and the regulations laid by the government.
The Table 5, 6, 7, 8, 9 and 10 indicates the list of checklists to be performed to identify
the gaps or non-compliances related to HR related acts.
Table 3 Checks Performed in Operational Acts
Indian Boilers Act,
1923
Inspection letter sent to the competent authority
License and Payment receipt of renewal fee
Sanctions taken for doing any alterations
Welders Certificate of all the welders
IBR Certificate of all employees
Name change certificate
GA drawing of the boiler and its parts
Registration of the boiler
Test reports of electrodes-if tests are done
Table 4 Checks Performed in HR related Acts – factories act
Factories Act,
1948
Factory License (registration license) (Form 4)
Register of accidents or dangerous occurrence
Factory Inspection register & report
Health register in form 16 in respect of factories involving
hazardous processes and dangerous operations
Annual return in form 20
Half yearly return in Form 21
Humidity register (Form 6)
Report of examination of pressure vessel (Form 8), list of
all pressure vessels installed

Table 5 Checks Performed in HR related Acts – contract labor
The Contract Labor
(Regulation &
Abolition) Act, 1970
Form I and II for registration of establishment
Half Yearly return in Form XXIV
Annual Return in form XXV
License (Form VI)
Muster Roll (form XVI), Register of advances (Form
XXII), Register of contractor (Form XII), Register of
deduction (form XX), Register of Establishments
(Form XIII ), Register of fines (Form XXI), Register of
overtime (Form XXIII), Register of wage cum muster
roll (Form XVIII), Register of wages (Form XVII )
Form VI - A (Notice of commencement of work)
Form VI - B (Return on completion of contracts)
List of contract employees employed along with details
of contractor
Table 6 Checks Performed in HR related Acts – gratuity payment
Payment of
Gratuity Act, 1972
List of insured employees (Form III)
Application for payment of gratuity in Form I, J, K
Employee nomination form in Form F, G, H
Notice in Form A (notice of establishment), if any
Notices issued in Form L issued to employees for
gratuity amount
Notice issued in Form M for rejecting claim, if any
List of employees who have been paid gratuity
List of gratuity claims that have been rejected during
the review period
Notice in Form B for any change in nature of
business, name/address, if any

Samant
Table 7 Checks Performed in HR related Acts – minimum wages
Minimum wages
act, 1948
Summary of all deductions from wages including the
extent of deduction, designation pertaining to it, reason
for deduction
Register of fines (Form I)
Register of deductions for damage and loss (Form II)
Muster Roll (Form V)
Register of wages (Form X)
Overtime register (Form IV)
Wage slips (form XI)
Annual Return (form III)
Table 8 Checks Performed in HR related Acts – bonus payment
Payment of Bonus
Act, 1965
Annual Return in Form D
Register of computation of allocable surplus - Form
A
Register showing the details of due bonus,
deductions and adjustments - Form C
Audit report of the book of accounts
Register of set-off and set-on of allocable surplus -
Form B
List of employees who have been paid bonus
Table 9 Checks Performed in HR related Acts – maternity benefits
Maternity Benefit Act
Maternity benefit amount paid with calculation
Notice received from female employee for
maternity leave
Details of payment of medical Bonus
Annual returns
Maternity benefit register maintained at the unit-
Form 10

Table 10 Checks Performed in HR related Acts – child labor
The Child Labor
(Prohibition and
Regulation) Act, 1986 &
The Child Labor
(Prohibition and
Regulation) Rules, 1988
List of child labors employed
Monthly medical checkup records of child labors
Attendance register (biometric data) and time sheet
of child labors
Wage register of child labors
Accident Register (Child labor)
Particulars of child labors (Form B) - Certificate of
age form
Annual Return in Form D
4. RESULTS ANALYSIS AND DISCUSSIONS
The audit process in an industry should check for the multiple locations that influence the
operations and process. Different locations house different operations, which means that the
applicability of legislation is also different across the locations. The laws like the companies
act, FEMA, E-waste rules etc. will be applicable for corporate office as it involves only
administration related works.
The Figure 3 shows that from the checklist activity performed at a sample paper industry
that observed maximum non-compliance in HR Department. The Figure 4 shows that
maximum non-compliance is observed in corporate office of the paper mill. The interviews
conducted with the floor personnel verifies the compliance physically. Risks hazards are
documented, and checked for relevance and compliances. The appropriate documentations
like licenses, returns, construction plans are checked and walkthroughs to check for
compliances like appropriate fire fighting equipment, presence of underground pipes, is
carried out. Query drafting and query discussion meetings are done with the legal teams and
process owners regarding the non-compliances found.
Figure 3 Non-Compliances at the Mill
Environment
21%
Health
6%
Safety
11%
Operational
19%
HR
43%
Non-Compliances at the Mill
Environment Health Safety Operational HR

Samant
Figure 4 Non-Compliances at Corporate Office
Table 11 Instances of Non-Availability of Employment Card
Name of
Contractor
Bill Type
No of
Employees
User Department
A Piece Rate 14 Civil Maintenance
B Piece Rate 8 Civil Maintenance
C Piece Rate 7 Civil Maintenance
D Piece Rate 10 Electrical
E Piece Rate 6 Electrical
F AMC 2 Electrical
G AMC 3 SP # 3
H AMC 4 RMH
I Piece Rate 4 CPC
J Piece Rate 50 CPC
Confirmations and comments were taken from the respective process heads regarding the
inadequacies found. Recommendations are made to suitably solve the problem as well as
tracking mechanisms are suggested so that the progress can be tracked in future.
Table 12 Instances of Excess disposal of waste
Waste Unit
Quantity
Disposed (FY
16-17)
Permissible Limit
(acc. to valid
CFO)
Excess by
A TPA 23210.47 13505 9705.47
B TPA 134731.22 86870 47861.22
C TPA 95.2 53 42.2
4% 8%
11%
77%
Non-Compliances at Corporate Office of
the mill
Environment Health Safety Operational HR

Table 13 Instances where rest day was not given
Sl.
No.
Employee Name
Skilled
Category
Department No of days
1 A Semi-Skilled Transport 20
2 B Skilled Staff 13
3 C Skilled Staff 13
4 D Skilled Staff 13
5 E Skilled Staff 13
6 F Skilled Staff 12
7 G Unskilled PM - 6 Mechanical 12
8 H Semi-Skilled Transport 12
Table 14 Delay in payment of PF
Sl. No.
Name of
Contractor
Challan
Submitted Date
PF Due
date
Delay in
days
1 X 1-Feb 15-Jan -17.00
2 Y 30-Jan 15-Jan -15.00
3 Z 29-Jan 15-Jan -14.00
4 A 26-Jan 15-Jan -11.00
5 B 23-Jan 15-Jan -8.00
From Table 12, it shows the instances of excess waste disposal in the paper industry and
Table 11 shows the non-availability of the employment card with the employees. The Table
13, shows the instances where rest day was not given to labors, and the remaining employees
worked without rest for around 12 to 13 days. From Table 14, it can be noticed that the
payment of PF was delayed for 4 employees for more than 10 days. From Table 12, it can be
identified that all the units had disposed excess units of waste.
5. CONCLUSIONS
From the above results, it can be observed that there can be various improvements done on the
HR policies and procedures, which help the workers to contribute more efficiently. The
workers should be trained regarding various policies and procedures, such that they undergo
various medical tests which are conducted for the well-being of the workers. The organization
has to make sure that the PF to be paid on time. Hence, to conclude the paper mill has to be
governed in a more efficient manner to avoid risks, and to be more compliant regarding
various processes in the organization.
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